Updated: Asper teams with Goldman, Catalyst to re-take Canwest

Goldman Sachs is backing a second bid for a controlling stake in Canwest Global Communications, rivaling an earlier overture from Shaw Communications.

The $120-million proposal is led by Canwest Global CEO Leonard Asper and includes financial backing, alongside Goldman Sachs, from lender and Canadian equity fund Catalyst Capital Group and former Rogers Communications execs John Tory and Rael Merson.

The competing bids for control of Canwest Global now promise a showdown in the Ontario Superior Court of Justice between Shaw Communications’ Jim Shaw and Leonard Asper – whose family founded the broadcaster – with the loser stepping away from the table.

‘This proposal will allow the public company to pursue a more focused business strategy that allows it to aggressively pursue opportunities in the rapidly changing media landscape,’ Asper said in a statement.

If his bid – to acquire a 32% equity stake and voting control in a restructured Canwest Global – secures court, regulatory and shareholder approval Merson would be installed as CEO and Asper would become non-executive chairman.

Newton Glassman, managing partner of the Catalyst Capital Group, in his own statement pitched the move as superior to Shaw Communications’ proposal as it requires no material changes to the broadcaster’s restructuring plan now before the courts, or to a future re-listing on the Toronto Stock Exchange.

‘The Catalyst Group proposal treats all the company’s unsecured creditors equally, and the continuance of a publicly listed Canwest provides creditors and other stakeholders with an immediate path to liquidity,’ he argued.

Glassman said Shaw’s bid proposes to treat creditors differently and ‘requires substantial amendments to the court-approved plan and faces hurdles that could delay the emergence of Canwest from creditor protection.’

Catalyst added Shaw Communications would redraw the shareholders agreement for CW Media Holdings, which controls the 13 former Alliance Atlantis channels, a move Goldman Sachs opposes and would never sanction. Goldman Sachs joined with Canwest in 2007 to buy the channels.

Goldman Sachs’ support for an Asper-led controlling stake follows Canwest Global removing a firewall between the restructuring media company and 13 specialty channels jointly run by Canwest Global and the US investment bank.

Goldman Sachs, in documents filed with the Ontario Superior Court of Justice as it directs Canwest Global’s restructuring, has argued the Canadian broadcaster is doing the bidding of the US bondholders that now control its destiny.